London is set for its largest oil company listing on the Alternative Investment Market in two years

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An Appalachia oil producer will find a home on London's junior floatation market (Source: Getty)

Courtney Goldsmith

London is set for its biggest oil and gas listing since 2014 as Diversified Gas & Oil gears up for a float on the Alternative Investment Market (Aim) Friday.

Diversified, a US-based firm that operates around 7,500 gas and oil producing wells in the Appalachian Basin, raised $50m (£39.7m) in capital. It produces 4,700 barrels of oil equivalent per day (boepd) mainly in the US states of Ohio, West Virginia and Pennsylvania.

The company has exploded over the past two years as it picks up conventional low-risk oil and gas assets from larger American production and exploration companies that are turning their focus to shale production.

Listing on London's junior floatation market will take Diversified's market capitalisation to $86.4m. It's the largest initial public offering (IPO) in the sector since Savannah Petroleum was listed in August 2014, after which plummeting oil prices nudged investors away from niche oil and gas companies.

The company will place shares at a price of 65p.

Robert Hutson and Robert Post established Diversified in 2001, and its head office is based in Birmingham, Alabama.

The company said it chose to list on Aim because of its focus on growth companies – the US has no comparable junior market. Diversified hopes to raise capital to expedite growth of the company with its low-risk listing.